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Hedge fund managers

  • Featured Story

    What Bill Ackman's Bad Year Says About Hedge Fund Managers

    Bill Ackman

    By David Zeiler, Associate Editor, Money Morning • @DavidGZeiler - December 17, 2015

    When hedge fund manager Bill Ackman warned his shareholders Tuesday that 2015 would likely be his worst ever, most investors probably had the same reaction: "I'm glad I don't have any money with that guy."

    But celebrity investors like Bill Ackman - who has built a reputation as one of the top activist investors - have big followings among retail investors.

    Here's why Ackman perfectly illustrates why imitating the strategies of hedge fund managers is such a bad idea...

Article Index

  • What Bill Ackman's Bad Year Says About Hedge Fund Managers
  • Top Hedge Funds Reveal These Best Investing Ideas
  • Stocks to Watch: Hedge Fund Managers Follow Our Lead
  • Congress Handing Out Stock Tips to Hedge Fund Managers

What Bill Ackman's Bad Year Says About Hedge Fund Managers

By David Zeiler, Associate Editor, Money Morning • @DavidGZeiler - December 17, 2015

Bill Ackman

When hedge fund manager Bill Ackman warned his shareholders Tuesday that 2015 would likely be his worst ever, most investors probably had the same reaction: "I'm glad I don't have any money with that guy."

But celebrity investors like Bill Ackman - who has built a reputation as one of the top activist investors - have big followings among retail investors.

Here's why Ackman perfectly illustrates why imitating the strategies of hedge fund managers is such a bad idea...

Top Hedge Funds Reveal These Best Investing Ideas

By David Zeiler, Associate Editor, Money Morning • @DavidGZeiler - April 7, 2015

top hedge funds

You don't have to invest in the top hedge funds to get the benefit of their stock-picking savvy.

By law, hedge funds must disclose their activity quarterly in 13-F filings. That gives retail investors a chance to pore over the holdings of the top hedge funds for ideas.

Hedge fund managers load up on their best ideas - typically their top five holdings.

This list of the top hedge funds and their top holdings should help get you started...

Stocks to Watch: Hedge Fund Managers Follow Our Lead

By David Zeiler, Associate Editor, Money Morning • @DavidGZeiler - November 24, 2014

stocks to watch

The latest 13F filings, which tell us what hedge fund managers were doing in the previous quarter, reveal several Money Morning picks among the most popular stocks.

In some cases, Money Morning made these picks stocks to watch well before the fund managers jumped in. But once you own a stock, it's always great to see the big money pile in behind you to help feed your gains.

Here's a look at some of the positive Q3 hedge fund trends that mirrored several of our long-standing stocks to watch...

Congress Handing Out Stock Tips to Hedge Fund Managers

By David Zeiler, Associate Editor, Money Morning • @DavidGZeiler - December 23, 2011

As if trading on insider information gleaned from their legislative duties wasn't bad enough, now it turns out Congress has been passing that information on to hedge fund managers as well.

That's helped many hedge fund managers make the same sort of lucrative bets in the stock market that has enriched members of Congress.

Meanwhile, Congress isn't doing anything to help individual investors, who don't have access to insider information and would probably be fined or jailed for doing what their representatives have been doing for decades.

"We the people need a new bill of rights from Congress," said Money Morning Capital Waves Strategist Shah Gilani. "I'm talking about our rights to control their indiscretions, lies, cronyism and the actions they take under cover of the protections of their offices."

Washington's latest transgression was revealed Tuesday in The Wall Street Journal.

New York-based broker-dealer JNK Securities Corp. arranges about 12 meetings a month between legislators and hedge fund managers.

If the information discussed turns into a useful stock tip, the hedge fund must execute the trade with JNK so it can earn a commission. But as questionable as it all sounds, no one is breaking any laws.

It boils down to "buying information from members of Congress in a perfectly legal way," Richard Painter, a former ethics lawyer for President George W. Bush and currently a law professor at the University of Minnesota, told The Wall Street Journal.

Greed, Corruption and Lies

In one instance, Conatus Capital Management scooped up 300,000 shares of Visa Inc. (NYSE: V) in the first quarter of 2010, knowing that a key provision harmful to the major credit card companies would not be included in the Dodd-Frank legislation. That tip came from a meeting with bill co-author Sen. Christopher Dodd, D-CT.

"Hedge funds and other investors have found that Washington can be a gold mine of market-moving information, easily gathered by those who are politically connected," Sanford Bragg, CEO and President of Integrity Research Associates, told The Wall Street Journal.

Both Republicans and Democrats defended the practice, telling The Journal that the discussions with hedge fund managers help them shape legislation.

Clearly, Congress can't be trusted with market-sensitive information. And if you think the revelations in The Journal or the CBS News "60 Minutes" expose on insider trading in November will slow them down, think again.

They have too much incentive to maintain the status quo.

A study by the academic journal Business and Politics shows that over the long term, members of Congress beat the market by an average of 9% annually.



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